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Feb 25, 2013

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justcorbly

Health care pricing isn't really subject to the much-vaunted controls of the free market.Typically, when you need health care you aren't in a position to shop around. You certainly aren't in a position to say, "Nah, I won't buy anything today."

Calling different providers, though, is likely to result in prices that vary widely, maybe by an order of magnitude. The link between the quality of this product and its varying prices from assorted providers broke a long time ago.

Finally, I know from my own experience that hospitals act as billing clearing houses, passing along the charges from the folks who were actually, in effect, independent contractors. Hospitals don't seem to vet or police these charges. Yet, they do include these charges as line items on their bills, with no indication that it isn't really the hospital you owe the money to.

If the market worked in these instances -- provision of essential goods and services to all regardless of their wealth -- then we'd be using for for clean water and air, police and fire protection, all education, etc., etc. Some extremists would like that. But, that's why we call them extremists.

Steve in NC

Its the only business in the country that can't tell you what something will cost but you have to agree to the charges regardless

Yes, most costs are negotiated by the ins co but I was admitted to the hosp for day surgery and pressed a bit for the cost and my cost. They couldn't tell me. The woman turned the monitor around to me - 30 ins co's - that was only the first screen page she said. Everyone has a different price.

No other business in America can get away with this.

polifrog

I take it you prefer the big government band aid solutions proposed by the article over a systemic solution that returns price control back to the consumer?

I prefer a fix.

Frankly, I believe that in the same way a monopoly breaks a market by limiting competition for consumer dollars, full coverage insurance destroys markets by eroding the value oriented consumer base. In both cases the provider gains full control over pricing.

Thus far our society's response to this market failure has been to expand the market of inflated pocketbooks via minimum insurance coverage standards, subsidies for those who can't keep up, and forcing people to buy insurance they don't need to feed the limitless pockets of consumers who no longer shop value. We don't need more of the same.

It is long overdue for us to recognize that the combination of free markets with full coverage insurance or even near full coverage insurance creates a monopoly like market failure that results in ever higher prices and that the solution is to limit the maximum coverage one can purchase for healthcare.

We need to break the dependence our healthcare industry has on the non price conscience consumer. If we ever see price tags associated with offered healthcare services again we will have returned to a healthy market, but not until then.

Bill Bush

A theory is like a wedding cake: lovely, but not very functional beyond the moment.

polifrog

@ Bill:

Well, that certainly is the case for our Keynesian Depression...

Ed Cone

Price controls seem to work pretty well in a lot of other places (see second link in the post above).

That's one weird thing to me about our healthcare debate -- there are time-tested, highly functional, less expensive alternatives in use around the world, but we're not allowed to mention them because, um, USA USA!, or something.

Lex

Not to mention that the AMA has imposed the kind of controls on the labor market for physicians that, had they been imposed on textiles and furniture manufacturing, would have saved tens of thousands of jobs in N.C.

Plenty of well-trained docs in other countries would love to live and work in the U.S. But they can't because there is no free market in physician labor.

Bill Bush

The lack of a free market in the medical field is what I was getting at in my post regarding the inutility of theory as a governing principle in that particular instance. I had read Brill in TIME and was also thinking of my own experiences. (I wanted to say what I did without falling into personal attack and swapped clarity for carefulness.) I suppose fixing it will be like winding down a large failed financial institution. They may not be too dissimilar.

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